Separating ERP fact from fiction
Productivity is one of the primary methods by which we can create long-term company viability. As a Harvard Business Review article puts it, senior leaders must “remove organizational obstacles to workforce productivity.” Through the automation of business processes, ERP remains one of the primary vehicles companies use to drive productivity.
Despite ERP’s longevity, misconceptions about the software still persist, according to several leading experts from Forterro’s global network of ERP companies. Based on decades of experience, these industry veterans gave their insights on how to separate fact from fiction when it comes to assessing the value of ERP for your operations.
Take a look at some of ERP’s most prevalent myths below.
Myth: ERP is primarily designed for major corporations.
When reading or viewing recent news about ERP, you inevitably will come across accounts of failed ERP implementations. And, in all likelihood, the price tag of that project will be somewhere around 10 million, 50 million, 100 million, or more. These high-profile stories often lead to the misconception that ERP projects are only designed for major enterprise companies with huge budgets. That’s not the case, according to Tove Bodin, a consultant for Jeeves, an ERP company based in Stockholm, Sweden. “ERP projects has as much range as the types of companies that use them,” she said. Indeed, just within Forterro’s portfolio of businesses, all of which deliver ERP to industrial companies in the midmarket, implementations can range from weeks to months to years.
Myth: An ERP project requires a total overhaul of your business.
While ERP prjects are typically extensive, you can set limitations on your implementation. “You can achieve milestones over time, with the first phase of the project addressing your top priorities,” said Alexandre Crettol, consultant and project manager for SolvAxis in Switzerland.
Crettol added that it’s entirely possible that you only need to upgrade certain aspects of your existing ERP system, rather than implement a new system. “Ask yourself if you really need to change for an entirely new ERP system, which includes migrating data, changing technology, and undergoing implementation,” he said. “It could be that your solution could be resolved by implementing a few new features into your existing system.”
Myth: An ERP product from a big brand is likely the best solution.
In just about all aspects of our lives, we are drawn to big brands. When it comes to ERP, the mentality may be that you’ll get a better solution by purchasing ERP products from the most well-known brands, like Microsoft, Oracle, or SAP. However, with ERP, that type of mindset could be the very thing that complicates your implementation.
When it comes to ERP products, you need to look at the product before the vendor or the brand name. According to Jeff Tognoni, CEO of Forterro, ERP products will work best for your company if they are built from the ground up with companies like yours in mind.
“When you have product fit, you won’t undergo the additional expenses of customizing the product to fit your specific needs,” he said. “There are hundreds of different ERP systems out there. Each one is written and developed from a slightly different perspective. To a certain extent, each one reflects the business processes used by its very first set of customers.”
Oracle and Microsoft, for example, have numerous ERP systems. Tognoni advised that you’re researching options from those companies, you should find the ERP product that was originally built for your type of business.
Myth: An ERP vendor has primary responsibility for implementation.
Unfortunately, many companies don’t fully realize the scope of the work involved with an ERP implementation. While it’s not the case that every ERP project will take more than a year and millions of dollars to implement, you should expect it to require the full dedication of your key staff members to make it a success. Your ERP vendor can only guide you through the process and the components of the ERP product. Only you and your team members have the insights about your company’s goals, challenges, data, and the key areas of your operations that need to be optimized.